Airport Conference Presentation

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Transcript of Airport Conference Presentation

The burden of Canada’s airport rents, fees and other service costs is undermining the competitiveness of Canadian airports compared with U.S. airports and discouraging economic growth.This diagram shows the proximity of American border airports to a number of major Canadian airports. A Path Forward for Policy Reforms to Strengthen Canada’s Aviation Supply Chain:Canada needs a single, cohesive National Air Travel strategy to chart a new course towards an overarching goal of increasing air traffic in Canada.A NATIONAL AIR TRAVEL STRATEGYSpark Plug or Toll Booth?The air transport industry has seen tremendous growth as a result, namely in the major components of Canada's airport infrastructure, which are now among the finest in the world.In the 1990's, the federal government stepped away from it's predominant role in the development of aviation in Canada and assigned the task to local communities and private sector stakeholders it felt would be better equipped to drive this economic sector forward.Concurrent with the long-term plan of ending airport ground rents, Transport Canada should transfer federally owned airports in the National Airports System to the airport authorities that operate them.

The costs imposed on the Canadian air travel industry are such that the fees paid by Canadian consumers are among the highest in the world.soDespite these huge advances, Canada's air transport sector remains extremely weak compared to the level of competition that exists in comparable markets, such as the U.S.In Canada, we have been using our airports as toll booths.In the U.S., they see their airports as economic spark plugs.

While the air traffic control component of the cost in Canada is less than in the United States, other Canadian aviation charges or fees have no U.S. equivalent because U.S. airports are subsidized.

Meanwhile, other Canadian airports, both within and outside the National Airports System, are also vital to the network. They connect Canadians coast to coast to coast and with the rest of the world. They also make significant economic contributions to the communities in which they are situated.

Toronto's Pearson International Airport is currently the most expensive airport in the world at which to land a plane.It has become apparent that the infrastructure in Canada's northern and remote regions is inadequate to meet the future needs of the communities currently being served as well as Canada's economic needs.Pelee Island AirportAlert, NunavutThe greatest infrastructure challenge for northern and remote airports is the state and availability of runways.As a whole, there appears to be an insufficient number of paved runways in the north. Infrastructure in serious need of update in northern and remote airports includeMeteorological informationRunways built on melting permafrostInstrument approach systemsRunway at the Tuktoyaktuk airport in the Northwest Territories eroding and experiencing stability issues due to increased wave action.Unpaved, short runways The formula for calculating ground rent in Canada today makes this cost so expensive that airport authorities have to generate additional revenue to be able to sufficiently pay the government of Canada ground rent. Transport Canada, together with the Department of Finance, needs to bring all relevant stakeholders to the table to establish a National Air Travel Strategy.Within such a strategy, future air transportation regulations, policies, and funding programs take into account the special needs and unique challenges in remote regions and in the North. Regional and northern airport infrastructure improvements must be a priority in order to encourage economic growth in Canada's remote and northern regions.The implementation of these policy reforms to our aviation sector will bring us closer to an end goal of increasing air traffic in Canada. Transport Canada needs to establish and implement a plan to phase out ground rents completely over time for airports that are part of the National Airports System.

THANK-YOU!Questions?With just over 75% of the Canadian population living within 90 minutes of the U.S. border, many Canadians are driving south to take advantage of lower American fares rather than fly from their local Canadian airportsAn estimated 5 million Canadians will cross the border to fly this year.VS

A TYPICAL TORONTO - BUFFALO DEPARTURE TICKETBASE FARE: $118.00HST: $3.25GST: $6.88NAV CANADA SURCHARGES: $7.50SECURITY CHARGE: $12.10CANADIAN AIRPORT IMPROVEMENT FEES: $25.00U.S. TAXES AND FEES: $24.80TOTAL: $207.53A TYPICAL BUFFALO - ORLANDO DEPARTURE TICKETBASE FARE: $124.00TAXES: $20.88TOTAL: $144.80To a degree, flying in Canada is expensive because landing a plane in Canada is expensive.Passengers departing Canadian airports often pay 60 and 75% above the airline's base fare to cover taxes and charges, compared to between 10 and 18% in the U.S.To do this, airport authorities charge terminal landing fees to airlines, which in turn pass along the costs to their passengers.Though it does not operate in Vancouver, Bellingham airport advertises substantially in Vancouver as well as sponsoring sports team . It also features its advertisement on the Canada Line that goes from downtown Vancouver to the airport.Their runway expansion was subsidized 95% by the FAA and, contrary to Vancouver, Bellingham pays no municipal taxes. In addition to Bellingham as a competitor, Vancouver has to deal with Seattle. Because Ottawa refused landing rights to Air France and Emirates both these Airlines are operating flights to Europe and the African continent and will be able to serve as a growing Hub to the fast growing Asia market .This refusal by the Federal Government will have very negative long term effects - not only on Vancouver Airport but also on the ailing tourism IndustryApprox 21% of the Vancouver Transborder passengers use Bellingham or Seattle .They are now building hotels around the airport to cater to the Canadian customers